This case involves a claim and subsequent lawsuit against the USAA insurance company
concerning coverage under my homeowners policy.

On June 10, 1996 my son Eric discovered a burglary from a car trailer parked outside a
warehouse I was renting in Lake Park, Florida. The trailer belonged to a friend of
Erics and he was using it to haul his race car to the track. Eric and his friend own
modified Ford Mustangs and had a hobby of drag racing and had been doing it for about 10
years. All of the items stolen from the trailer were either Erics or my personal
tools and some of his extra car parts that were in the trailer at the time. I wasnt
sure that my insurance would cover these items because the burglary wasnt on my
property or in my vehicle. I have all my insurance coverage (automobile,
homeowners, life, and rental) with United Services Automobile Association (USAA) and had
been a member for over 34 years, since 1964 when I first joined USAA while on active duty
in the US Army.

I called USAA the next day to ask if the burglary was covered under any of my policies.
I explained that the burglary occurred from a trailer parked at a warehouse I was renting.
The lady that answered my call informed me that my "personal property" (or my
sons being he lived with me) was covered anywhere in the world under my home
owners policy. She took the information and told me an adjuster would be contacting me.
This call, by the way, was recorded, as are all calls made to USAA, unless the caller
requests to not record the call. Recording calls seems like a good idea, but I found out
later that USAA somehow "loses" the recordings that are unfavorable to them!

The next day an adjuster from USAA called me and asked questions about the burglary.
Most of the questions he asked concerned the warehouse I was renting, what I did there,
was it a business, etc. At that time we were just using the warehouse for working on our
personal cars and projects. Being that most of the items stolen were mechanics tools
and car parts, he asked if we did automotive repair at the warehouse. I again told him
that we only work on our own cars and it was definitely not an auto repair shop. I
had used the warehouse previously to start manufacturing fiberglass parts, but the
business (called Stealth Industries) had been closed for 5 months, and we were just doing
personal work there at the time of the burglary. Besides, the theft was not from the
warehouse, but from a trailer parked outside on the street. The adjuster kept asking about
Auto Repair and mechanics tools and trying to establish if there was an auto repair
business at the warehouse. He didnt ask about the trailer or about any other
business that was previously done at the warehouse.

Later, when the adjuster received my list of the items stolen, he said that because
it was such a large amount (over $5000 I believe he said) he would have to turn the claim
over to another "group" at USAA.

I also had a claim the previous year on my automobile policy with USAA which was over
$6000 (flood damage to motor in my car) which I believe may have been a factor in
USAAs decision to fight this claim. It appears to me that having 2 claims within a
few years (even though it was different policies, automobile and homeowners) must have
triggered their "guidelines" to automatically deny the second claim!

I reported the burglary the following day to the Lake Park Police. An officer responded
and he made out the Police Report. He asked for a list of the items that were stolen, and
I told him it would take a while to put together the list, being there were so many of my
tools and Erics tools in the trailer. He gave me a form to fill out and return it
when I had the list. I also needed a list of the tools taken and a description of them for
the Insurance Report for USAA, so I made the list and gave a copy to the officer also. The
value of the tools and parts stolen was over $7000.

I needed a copy of the Police Report to file with the insurance claim, so I had my
daughter pick up a copy from the Police Station. This is where things started to go awry.
The Lake Park Police Report had listed the theft from a business location, Stealth
Industries. I called the police officer who made out the report and told him that might be
a problem, because I had specifically told the insurance adjuster that it was not from a
business, and I had never told the police officer it was, and never even mentioned a
business name to the officer when he took the report. All the discussions with the officer
took place in the street where the trailer was burglarized, and the warehouse was never
discussed. He then said that he was directed to make the report that way by other
officers in the department, and that the insurance company should call the LPPD if
there was a problem. I believe now that this police report "modification" was
done on purpose by the Lake Park Police Department due to problems my son was having with
one of the other officers of the LPPD. (I wont get into all the details, but
this officer apparently owned a Mustang that was stolen while parked at a gay bar in West
Palm Beach, reported it stolen elsewhere, and when it was recovered a week later,
had a stolen motor in it that his friend at Quality Automotive in Lake Park had installed
for him. He got in a lot of trouble over this I understand, with both his insurance
company and the LPPD, and was even suspended for it. He erroneously believed that my son
Eric had something to do with his car being stolen and has been harassing him ever since).

It is my opinion that the LPPD, when questioned by the USAA adjuster or investigator,
made erroneous statements concerning the facts of the burglary and report. It appears that
USAA acting in bad faith was more than willing to work with the LPPD to
"manufacture" reasons and excuses to deny paying the claim. From this point
on, I believe there was a conspiracy between USAA and the LPPD to accuse me of fraud and
to deny my claim. It was to their advantage to work together and use the combined power of
a "big insurance company" and a "police department" to gang up and to
battle the "little guy".

It became obvious to me early on that USAA was looking for any reason they could
to deny my valid claim. I talked to the USAA investigator a few months after the claim was
filed. At that time he had not questioned anyone involved in the case, but said he had
only been talking to the LPPD and an outside investigator he had hired.. He had not talked
to me, my son, the owner of the trailer, the owner of the warehouse, or any of the people
who had any knowledge of what had happened or gathered any facts in the case.

I was then requested by USAA to give an Examination under Oath concerning the
burglary. The USAA attorney at that time claimed the reason for the examination was to
exchange information between myself and USAA to try to resolve the claim. He used such
phrases as "purpose is to gather information regarding my claim", "gain
information to process the claim", "an opportunity for me to bring to the
attention of USAA any information they should be aware of ", and "purpose is to
exchange information". It became very apparent during the "Examination"
that their only reason for questioning me was to dig into my personel life and generate
confusion concerning the facts of the case, make unfounded false accusations, and then use
the "discrepancies" they themselves caused to deny my claim! For example,
after about 6 hours of questioning by the USAA attorney, the USAA adjuster, and their
investigator, the only "items of controversy" were the wording of the original
call I made to USAA regarding the claim (now they claimed I never said the burglary was
from a trailer!), and an accusation by the USAA investigator made about ME altering
the police report I sent them! At this point I became very angry and accused them of
false, unfounded accusations that could easily be clarified in a few minutes. First of
all, the initial phone call to USAA was recorded, so it would be very easy to
verify what I had reported. The Second item could be resolved by a simple phone
call to the LPPD to ask them about the police report. The USAA investigator said that
he had not done either, but would do so the next day. I told the attorney and the
investigators from USAA that they should check out their facts before making false
accusations and then demanded that they apologize to me for the false accusations before
Id ever talk to them again. I also requested a printed copy of the Examination under
Oath to verify what had been said, to show documented reasons for my concerns, and to send
a copy to the Florida State Insurance Commissioner. (Although my later contact with the
State Insurance Commissioners Office led me to believe that they tend to side with
the insurance company in a dispute rather than the person complaining to them.) It appears
that since Hurricane Andrew years ago, the state of Florida has to cater to the Insurance
Companies to keep them in the state!

The day after the Examination, I phoned the USAA investigators supervisor and
complained about his conduct. He agreed with me, and said that they had since
called the LPPD and verified that I had not changed the police report, and also checked
the tape of my initial call and verified what I had said. He said that this particular
investigator was an ex-New York cop, was rude, and it was his nature to act in that way he
did. (This must be a characteristic required in their "special unit" that
handles claims over $5000!) He also said that this investigator would no longer be on the
case. I might add that his supervisor was the only person at USAA who seemed reasonable
to talk to, so of course, I was instructed not to talk to him anymore, and to direct all
my questions to their attorney (the unreasonable one).

At that point, I expected to hear from USAA with an apology, and to continue the claim
processing. Instead the USAA attorney took the tactic of claiming there was "no
precedence for an apology on their part, or for them sending me a copy of the
Examination", and basically ignored what had happened during the Examination and
follow-up conversations. Instead he just did not forward the copy of the
Examination under Oath to me as I requested. He later tried to make it appear that I did
not want to sign the Examination under Oath so he could use it as an excuse to deny the
claim! I have copies of all the correspondence with USAA and their attorney concerning
these matters. Of course, the USAA attorneys have a way of ignoring facts, and fabricating
their own versions of what happened.

I then received a letter from USAA saying that my claim was denied due to lies,
concealment of information, fraud, etc., without any details or facts to explain why.

As the case developed, it was learned that the "excuse" by USAA to deny the
claim was to accuse me of operating an auto repair facility out of the warehouse, thereby
claiming the tools stolen were business tools! There never was an auto repair business
there, and there was no evidence ever presented that there was. I showed USAA all the
records of the earlier business of Stealth Industries, which clearly showed that it was a
fiberglass fabricating business that had discontinued operation in late January 1996. The
only "evidence" they were able to present at one of the depositions was some
"hearsay" by the above mentioned LPPD Officer, and a "phony" zoning
report form he also presented. (A formal request to the Lake Park Zoning Board revealed
that the alleged violation was not even on their records). He also presented a
"doctored up" receipt that my son received for his personal car from a
transmission repair shop to imply he ran an auto repair shop. None of these items were
presented at the trial (which would have been very embarrassing to both USAA and the
LPPD).

It became apparent that another strategy of USAA was to nit-pick my claim report, my
Examination under Oath (and my sons which was later given), and generate more
confusion and make if appear that we werent "cooperating", and then deny
the claim for those reasons also. Another "out" for them in their policy is to
avoid paying if there is a "failure to cooperate".

At this point I realized that based on the amount of this claim and my previous
automobile claim I had made, they just flat out were not going to pay the claim and
would make every effort to try to find some nitpicking reason to justify their denial.
At that point, after a year of frustration, abuse, and false accusations by USAA and their
attorneys, countless hours answering questions and letters, and their endless requests for
personel records, bank statements, phone bills, tax returns, cable bills, etc for the last
5 years, I decided Id had enough; USAA was being unreasonable, was not acting in
good faith, and so I hired an attorney. (I only wish Id done this earlier, but I
assumed that USAA would act in good faith, and not resort to the tactics they did to get
out of paying a valid claim.)

I would advise anyone that when an insurance company decides to subject you to their
"Examination under Oath" that they have already decided theyre not
going to pay the claim, are starting litigation, and are gathering up phony reasons to
deny the claim. Id like to see some statistics on "settled" claims
that have gone past the point of "Examination under Oath" if anyone has any!
Thats also a very good time to hire an attorney to have someone on your side looking
out for your interests and rights against the big insurance attorneys.

Then USAA tried a new tactic. (to me anyway; maybe insurance companies do this all the
time). They put together a list of numerous ways that my claim would be invalid (according
to USAA) and accused me of all these numerous (but unfounded) scenarios! They filed
a "Request for Admission" (I believed it was called) for each item, and claimed
that if they did not get a reply for each one that it would be an admission that the
statements were true! Again, I had to spend numerous hours answering them and explaining
their numerous errors. After they received my responses, they requested
"clarification" of the answers! More useless hours spent!

The next tactic of USAA, now that they realized that they were wrong about the auto
repair business, and the other scenarios they "invented" which I
categorically denied, was to concentrate on the excuse that we were not
"cooperating" with them. The first feeble attempt was to claim that we were
"preventing them from questioning Jimmy, the owner of the trailer that was
burglarized. The USAA attorney claimed that they had called him 4 times, and he did not
returned their calls. I talked to Jimmy and he said that his Mom said that someone from
USAA called once, and did not leave a return number, and did not hear from them
again other than that one call. I called the USAA attorney and told him of my conversation
with Jimmy, and he still insisted that they called him 4 times and left phone numbers to
call, and became very irate and called me a liar. I told him that he was the one
who was a liar because Jimmy had no reason to lie about it, but the USAA attorney
sure did (the failure to cooperate ploy!).

I then gave him Jimmys home phone, work phone, and told him to call him now
because I knew he was there waiting for their call. I think they finally got to him, but
to their dismay, he agreed with our story. So out of all this, they still said that
"we refused to cooperate by preventing them from contacting Jimmy"!

Another example was to say that we "failed to cooperate" and help them locate
and question my sons girlfriend at the time of the burglary. I read my sons
Examination under Oath, and when questioned about his girl friend, he gave them her
name and phone number. I verified that the name and phone number given to them were
correct. She also said that they never tried to contact her, never got a phone call from
USAA. The fact is that they never tried to call her (Re: USAAs Claims Adjuster Ben
XXXXXs Deposition) but needed to put together a list of items to show
"failure to cooperate". (Ben XXXXX never appeared at the trial, but we were
prepared to hand him a telephone and have him dial her number.) He was probably
embarrassed by his Deposition and didnt want to lie under oath at the trial.

If USAA had acted in good faith and concentrated on the facts of the case, instead of
their "wishful thinking" approach, this case would have ended long ago. But
again, insurance companies do this every day of the week, and an individual like me
(fortunately) goes through this maybe once in his lifetime. I guess the insurance
companies use the strategy that works best for them, with complete disregard for the
individual they are "out to get" once certain dollar amounts of claims come
before them.

They also nit-picked the hundreds of questions they asked to come up with "lies"
to justify their denial of the claim. These ranged from the initial phone call I made
(never presenting the tape of the call that would clarify that), to the failure to help
them contact witnesses for which they had valid phone numbers, to whether a "dog may
have been barking" at the time of the burglary.

The most ridiculous tactic was for USAA to claim that my sons hobby of drag
racing his Mustang, was somehow tied to my previous partial sponsorship of a portion of
his expenses, and therefore the only business of Stealth Industries was the race car! They
really stretched things by saying that in their opinion, if I sponsored even a small part
of his racing hobby that, therefore, anything used in his hobby such his personal tools
and equipment, was "business" property, and therefore, not covered under my
policy. (I might add that none of the items I ever paid for and used for
sponsorship were any of the items that were stolen).

Another tactic of USAA was to flood the court with motions, requests, and various other
paperwork to try to wear me down. By this time the law firm representing USAA switched to
their "trial" attorney who wasnt obnoxious and irritating as the first
attorney was.

(By the way, the law firm is Butler, Burnette & Pappas of
Tampa, Florida. Anyone out there have any dealings with them with Big Insurance?)

They obviously did not want him to appear before a jury and irritate them as
well (seemed to be his specialty). The Judge on the case made the comment that in all
his years of both civil and criminal court that he had never seen so many motions and
requests filed in one case.

I might add that ALL the USAA motions they made were denied by the Judge.
They were all pretty ridiculous and humorous.

The Judge really got a kick out of their Motion for Summary Judgement because we did
not cooperate by helping them contact a person when we had provided them with a name and
phone number! He had the same reaction for a Motion for Summary Judgement because I failed
to sign an errata sheet for the Statement under Oath that they had refused to send me!

They seemed surprised that this Judge used his common sense and understanding of the
law and ruled that all their frivolous motions for claim denial were just that. Perhaps
there are other judges they deal with (and support financially) that usually agree with
them!

A jury trial was eventually held, and I won the suit against them for about $7000.
Of course they are appealing the verdict, and this will probably drag on for another
couple years. So far they will have to pay my attorney costs of almost $xxx,xxx, their own
costs of well over $xxx,xxx (and of course my $7000). By the time the appeal is
resolved, there will probably be double that amount spent so far on attorneys fees.
I can only assume there must be some sort of tax write-off for the Insurance Company for
these costs (and their attorneys do get paid by the hour). Or perhaps they need to
spend some of their windfall profits theyve made since the big insurance premium
increases in the last few years.

Of course in the middle of all this, USAA cancelled all my insurance with them which
has presented me with the additional difficulty in finding new insurance while suing an
insurance company!

Try getting a new homeowners policy or car insurance in Florida, especially
when you are suing another insurance company for a claim over $6000! Ill be paying
higher premiums for the rest of my life!

Based on USAAs behavior and the results of this court action, we have filed a
"Bad Faith" claim against USAA. This appears to me to be a "classic"
definition of a bad faith claim, in that the insurance company has ignored the facts in
this case, has done nothing to try to resolve this claim, and just acted in bad
faith to deny the claim for trivial and frivolous reasons. Maybe this tactic works most of
the time for "Big Insurance" companies, in that most people dont have the
time, patience, intelligence, money, or desire to battle a big insurance company and their
high priced attorneys.

USAA can have their side of the story here when they
respond.

Ed Note.

We are alway intereste in hearing both sides of the story. We would like to hear why
USAA or its lawyers do these kinds of manuvers.